Do American VCs approach startups differently than European ones?

When I started investing in European startups in ‘13-’14 (Pipedrive, Algolia, Talkdesk, Front, etc.), most European VCs had very different models than U.S. VCs.

Specifically — for many Euro funds, the model was $50m exits.

Vs. U.S. VCs had $1b+ exits as their model.

Neither is right or wrong, but they are very different. If your VC fund model is around $50m exits, paying a price even higher than $2m-$3m in valuation starts to stress a model. Because if you want to make 10x+ on $50m exits, then even $5m post-money is already very expensive. And you also become very sensitive to the dilution from follow-on rounds. So you want to keep the total amount raised pretty small.

But times have changed. More Euro VC funds have raised much larger funds, and aligned around Unicorn exits. Skype, Spotify, Transferwise, Ayden, and many others do that. It took a little longer in SaaS and B2B, but it happened there too.

As they have, valuations, check sizes, and general approaches have become more similar to Silicon Valley.